Intel: Under the smoke and mirrors

The contrast between what Intel was saying and doing at its annual analyst meeting was pretty revealing.

SAN JOSE – The contrast between what Intel was saying and doing at its annual analyst meeting here yesterday was pretty revealing.

The context was clear: Analysts think Intel's PC franchise is starting to look like a pair of worn disco pants at a Web 2.0 party where ARM smartphones and tablets are the latest fashion. Intel execs fought the characterization on many fronts. But their actions spoke louder than their words.

I heard Intel execs repeatedly claim they can design a processor as low in power consumption as anything in the ARM world. Yet the big news from the event was about how Intel was going to increase its focus on low power design, implying execs thought the company needs to do better.

Intel's Dadi Perlmutter did show a chart that—without any hard numbers—suggested Intel's 32nm Atom-based Medfield smartphone processor is about as good as any 40nm chip out today in milliwatt-level power consumption. But so far the chip has been rejected by Nokia, and Intel lacks the confidence to share the names of anyone who might be committed to using it.

One OEM told me Medfield is too power hungry. He called for a new ground-up x86 design beyond the scope of an Atom shrink.

Intel execs also crowed about how Intel has become a software powerhouse, giving it an edge over ARM-based competitors. Yet the reference design for smartphones and tablets it trotted out ran Gingerbread, last year's version of Google's Android environment. A port to the superhot Honeycomb software is still in the works, and MeeGo—Intel's version of mobile Linux—was a footnote in the proceedings.

With 9,000 software engineers, Intel is now the world's third largest software company, execs said. I suspect it is at least fourth behind Google, Microsoft and IBM. In any case a third of those Intel engineers are working on antivirus and other security software in the new McAfee subsidiary, a big factor in how you view the numbers.

I also heard plenty of chest beating from Intel about how vibrant the PC market is with big growth in relatively small emerging markets like Venezuela and moderate growth in mid-sized markets like Mexico and Russia.

The slides Intel put up did not show the lackluster numbers in major markets like Western Europe, Japan and the U.S. Overall the company still estimates the PC TAM will grow 14 percent worldwide over the next several years. But it did admit its estimate will get a haircut down to 11 percent if tablets are as big as some predict.

I am beginning to sense some denial here. Let's not even talk about the FUD Intel is starting to spread on Windows on ARM.

The chart on the left told a more accurate tail. Quarterly sales of Intel's PC client division appears pretty clearly to be peaking. The image would be even more clear if Intel showed a longer swath of the group's financial history.

INVENTORS - DO NOT TRUST INTEL
I invented a CPU cooler - 3 times better than best - better than water. Intel have major CPU cooling problems - "Intel's microprocessors were generating so much heat that they were melting" (iht.com) - try to talk to them - they send my communications to my competitor & will not talk to me.
Winners of major 'Corporate Social Responsibility' awardS!!!
Huh!!!!
When did RICO get repealed?"
INVENTORS - DO NOT TRUST INTEL!!!
BTW, I have the evidence - my competitor gave it to me.
BBTW, I am prepared to apologize to Intel if;
• They can show that the actions were those of a single individual within the company, but acting outside corporate policy, and:
• They gain redress on my behalf.

A first for Rick in crediting the McAfee purchase as an unqualified good move, at least I think he's never yet quite come out and said it. And regarding MeGo; Intel looks to have a system solution in mind... the software is in place and the hardware's arrival, to successfully compete at any point in the segment stack, looks to be on its way.

True, DSPs are a different kind of thing compared to low power devices. Have to remind you though that today’s DSPs have speculative execution and branch prediction. We all know the lamentable Intel journey in the DSP business even though ADI keeps on telling us it was a great experience...

Yes, Intel has the cash reserves and are in a position to make an effort to grow out of the PC processor market. From the consumers point of view, it would be nice to have Intel competing in low-power mobile processor market. From Intel’s point of view, what motivates Intel to leave its strong-hold in CPU processors and move out of their comfort-zone? Why not focus its effort in trying to improve what Intel is already good at? (E.g., Revamping x86 architecture)?

All the people who constantly count out Intel have not learned from history. They have the tenacity come back and win as they proved time and again. I am not sure whether 10 years from now there will be ARM but there will be Intel.

Good article, Rick. But, as you point out, there are a lot of unanswered questions being covered up with a lot of hype. They have the cash, but do they have the will and the corporate culture to enable it.